Objects of desire
19 January 2001
29 July 2014
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BWB Briefing for Charities and Social Enterprises — Law Commission reports on charity law reform programme; and more
11 September 2014
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"When I give food to the poor, they call me a saint. When I ask why the poor have no food, they call me a communist." With this comment, Brazilian priest Dom Hélder Câmara touches on the controversy felt by some UK organisations which undertake humanitarian or other worthwhile relief, but which are not charities under UK charity law. "You can deal with the consequences of injustice, but not the causes, under charity law," says a spokesman for Amnesty International UK.
Campaigning by charities has always been a bit of a hot potato. In September 1999, the Charity Commission reprinted its 1995 guide to charities on the types of campaigning activities they can and cannot undertake. Basically, political purposes are not charitable, but charities can engage in political activities provided they are ancillary to their objects.
Simon Weil, head of Bircham Dyson Bell's charity practice, says: "The key concept is whether the campaigning is ancillary to the charity's objects or is taking it into another realm. That's the acid distinction to be drawn." Where it goes beyond the charitable object's realm, charities cannot undertake the activity. As a result, some charities form trading or campaigning companies.
Charles Russell charities partner Simon Wethered says that because of the risk of libel actions arising from campaigns, charities should distance themselves from trading companies that participate in campaigning. "It's important to create 'legal firewalls' between charitable assets and a legal campaigning body," he says. "Charities often have considerable assets, and you don't want to put that at risk if you come a cropper."
Engaging in illegal political activity is a breach of trust and the trustees would be personally liable to repay any expenditure in pursuance of it. Weil recommends that any charity contemplating such activity should approach the Charity Commission to discuss it first.
Historically, the position was clearer than it is for charities today. Jonathan Burchfield, head of Nabarro Nathanson's charity group, explains that the previous position was that charities could not get involved in political campaigning at all. "Political" in this sense means changing government or local authority decisions concerning the law or policy, either abroad or in the UK.
Burchfield says: "The attitude has changed over the years and the Charity Commission has recognised that it is appropriate for charities to become involved in political campaigning if relevant to its objectives. It's sensible to permit charities to get involved in changing the law and policy relating to them before problems arise which they would then address."
The new Economics Foundation's executive director Ed Mayo feels that the commission's guidance is grey and contributes to self-censoring by charities. He believes that charities are more conservative in campaigning than they would be if the regulations were clearer. He says: "Fundamentally, a part of a charity is speaking out for those who the charity works for. If we're muzzled against doing that, it's not being true to the beneficiaries of the charity."
The National Anti-Vivisection Society (Navs), founded in 1875, had charitable status until it was removed under a House of Lords decision in 1947. In the case, Navs' objectives were held to be detrimental to public benefit and health, because of the result not experimenting on animals would have on medical science and research. The court recognised that what was charitable in one age may not be in another.
Navs director Jan Creamer says: "Animal groups aren't charities because they help animals, but because their work comes under the fourth head of the act (beneficial to the community). Animal welfare is considered to elevate our sense of humanity and is, therefore, beneficial. The House of Lords debate hinged on whether to oppose animal experiments would be beneficial to people or not. Now that much more is known about the crucial differences between species, especially at cellular level, the argument against animal experiments is much stronger."
Charities must ensure that political activities in pursuance of their objects are approached in a rational and reasonable manner. The commission's guidance says that views expressed must be based on a "well-founded and reasoned case", and should be expressed in a "responsible way".
Adverts are one way in which charities become involved in trying to change the law or influence the public. But emotive adverts cause problems. The Advertising Standards Authority and the Charity Commission have roles in policing the advertising aspects of charity campaigning.
Frank Widdowson, director of legal services at the RSPCA, is more than familiar with these rules. Recently, the RSPCA has contributed to the drafting of the Hunting Bill, which Widdowson explains contains three schedules: one put forward by the hunting lobby, one representing a middle-way group and the third derived from animal welfare group proposals (including the RSPCA).
Judith Hill, head of the charities group at Farrer & Co, sits on the Charity Law Reform Advisory Group. The group is a working party established by the National Council for Voluntary Organisations to assess whether the law on charitable status should be amended to fit with today's circumstances. The group has produced a paper and is consulting with its members on charitable law reform. "There's a mood to redefine what is charitable at law," says Hill, but she does not think that this will affect what is deemed political under charity law.
Stephen Lloyd, head of Bates Wells & Braithwaite's charity group, says now that human rights legislation is incorporated into UK law, there is an argument that upholding the law is not a political objective, but a charitable one. Hill thinks that the position regarding an organisation such as Amnesty International could be different with the Human Rights Act coming into force, but she says that each case would need to be looked at on an individual basis.
Burchfield acknowledges that political campaigning by charities is an area which needs constant review and debate. He says he is of the old school and feels that tax relief and charitable status should not be given to someone promoting a change in the law or government policy. But now that Parliament has introduced human rights laws, he, like Hill, believes that organisations that are set up to promote human rights should be able to push for charitable status.
A further landmine for charities to watch out for in the political campaigning arena is the Political Parties, Elections and Referendums Act 2000. Bates Wells partner Philip Kirkpatrick says that organisations will need to exercise care when campaigning in the 365-day period before an election. The act restricts the amount that can be spent by charities on "election material" in an election run-up to £10,000. It is widely drafted and could catch charities in some situations. Kirkpatrick warns about reasoned arguments persuading political parties to adopt certain positions. "Even if the campaigning is within the ambit of the Charity Commission's guidance, charities could get caught and inadvertently commit an offence under the act," he says.
Public debate concerning which organisations should be charities and the types of activities that charities can undertake is rife. And for now, for organisations such as Amnesty International, the public's perception does not always sit easily with the legal position. n